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Complex or Commercial?

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Terrel L. Shields

Elite Member
Gold Supporting Member
May 2, 2002
Professional Status
Certified General Appraiser
I am trying to help save the license of a local appraiser who tried to upgrade to Cert. Gen. Seems she did some commercial properties w/o co-signature that exceeded $250,000 limitation under the mistaken notion that somehow that applied to the loan amount not the actual appraised value. Submitted as examples of her work, they are now going to a full board meeting and possibly sanctioning her.

I wrote a letter to the board in her support and how we were short handed that I hoped they would not be too harsh. Seems they had little problem with content of the report, only the limitation problems.

When lic. came along in 1992, the $250,000 limit was a much larger property than the same dollars will buy today. That means there are fewer and fewer properties that CR's can appraise without co-signatures. And who wants to co-sign work of someone else? It is not profitable either for one or the other party, or else the client is paying double. The person above writes reports in a different fashion from my self, and personality wise I certainly don't desire a business relationship with this appraiser. But without my or someone's co-sig, I am going to be stuck with quite a bit of additional small commercial work that she currently does and frankly, I don't want it.

Lastly, I posed this question time and again and have yet a satisfactory answer. We are often asked to appraise 40 acres (or 80, 120, even 400) with a dwelling and maybe a barn. Cattle or horses are not particularly profitable, but serve to offset some of the cost of the land. Add two poultry barns. Do we suddenly have a commercial property (likely not enough income to claim as a full time job) OR is it now a complex residential property? And if the barns do not have a contract and are vacant, does that change the status? It may change the H & B use, but does it change it from Res to Comm to Res again???? HUH? HUH?

If, as I would contend, 40 ac. + dwelling + (2) poultry barns = Complex residential and not commercial property, a CR could appraise it even if it was worth $1,000,000. The laws [banking & appraisal] need to set some kind of definitions for "Complex". Particularly, as it relates to agri properties. It is not unusual to have $120,000 worth of land, $120,000 dwelling, and $120,000 worth of poultry barns. Equal mixes of land, residential, and agricultural. Currently according to the Regs, it is the CLIENT (Bank) who determines if a property is complex or not (and you thought that was your call, right?)


Senior Member
Aug 23, 2002
Professional Status
Certified General Appraiser

I would look at it as follows:

What is a typical chicken farm in the area? Are there any? In order to sustain a viable commerical operation, how many chickens are needed? Does this property fit that profile?

Could this property better be described as a "gentlemans" farm? A typical city worker who "wants to get back to the farm" and as a hobby (defined as not being able to suport the property) raises some chickens, corn, a few head of cattle, etc. This is the weekend farmer who can not support the property by the farming operation.

If it is the latter, I would not see why a CR could not perform the appraisal. It would obviously be a complex residential property, not a commerical use.

Good luck. Let us know what happens.
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